Is Multiple ISAs the Best Way Forward?

TractorFactor

Never had an ISA before as I didn't have enough cash to reach the tax threshhold.
Now I have.

I have six savings "pots" attached to Chase for various things.  Each one saves around £1000 a year.

I don't really want to change how I bank but it seems those pots, together with my current account interest will start tipping me over the limit.

I'd like to keep the separate pots, so should I open six different ISAs?
I don't really want any new bank accounts so I was looking at existing banks I have accounts with - the usual HSBC, Lloyds, Halifax, but all are woefully low in interest.
Chase currently gives me 2.5% on the balance.

I don't really plan on taking money out until it's needed but might need to in an emergency.
I understand when I take money out, it still counts towards the £20k limit (yes, I am aware this is going down to £12k in a couple of years).
I am happy not really investing in stocks and shares at the moment - these accounts are purely there to save up money for specific things.

Are there any other savings accounts I can look at, that means HMRC won't be writing to me to ask for tax money?

El_Torro

You are allowed to open 6 different ISAs. You'll probably need to open them with 6 different providers though, so won't be getting an optimal interest rate on all the money. Personally I would open just one and split the money you need in a spreadsheet rather than having separate accounts. Doesn't sound like you want to do that though. 

Have a look at Flexible ISAs. This allows you to withdraw money from your ISA and put money back in within the same tax year and it not affect the maximum amount you're allowed to pay in every year.

One option for tax free saving is Premium Bonds. You're only allowed one account per person and to be honest Premium Bonds aren't really worth it unless you have a lot of money saved up in them and you'd otherwise be paying 40% or more tax on your interest.

ColdIron

Most people would open a single ISA. I think Zopa are unusual in allowing multiple 'pots' within an ISA a bit like Chase. Not the best rate though

https://www.zopa.com/help/article/why-do-i-have-multiple-isa-pots

TractorFactor

Hmm, one pot might have to be the way, which is a shame as I had everything set up nicely with standing orders  and meant I could see how each account was growing.  But now have to change them all to go to the ISA account and have extra work as a spreadsheet.

This year was an expensive year though as I moved house so had extra money all over the place.  But it won't take long to get back to that same position.

I'll have to see how much these individual accounts make in interest as I could move the biggest one and then keep the others as they are and still be under the £1000 limit.

The_stingemeister

El_Torro said:

You are allowed to open 6 different ISAs. You'll probably need to open them with 6 different providers though, so won't be getting an optimal interest rate on all the money. Personally I would open just one and split the money you need in a spreadsheet rather than having separate accounts. Doesn't sound like you want to do that though. 

Have a look at Flexible ISAs. This allows you to withdraw money from your ISA and put money back in within the same tax year and it not affect the maximum amount you're allowed to pay in every year.

One option for tax free saving is Premium Bonds. You're only allowed one account per person and to be honest Premium Bonds aren't really worth it unless you have a lot of money saved up in them and you'd otherwise be paying 40% or more tax on your interest.

Surely you can open far more than that?  I know you're replying to someone who has stated 6 isa's. but your reply appears to suggest 6 is the maximum.

Archerychick

I use a spreadsheet to keep a record of my ‘pots’ but have only a couple of cash ISAs - this way I can ensure I optimise return on interest rates. 

You could have six separate accounts but as had been mentioned you’ll likely end up with a sub optimal interest rate. 

david72

If you want to put your savings into different "pots" for different purposes, it could be worth looking at providers which let you open multiple ISA accounts with them, and then you would only have one extra set of login details to manage, rather than having to use multiple different providers to get the number of accounts that you need.

Skipton, Newcastle, Nationwide are all capable of letting you open and fund multiple ISAs: there may be other providers that also do so, but sadly far too many still can only cope with one new-funds ISA account per year (other than existing ISAs transferred-in to them from elsewhere).